CMA CGM Confirms Order for Nine Megaships based on market recovery

The number three
ocean carrier CMA CGM while issuing its second quarter results has confirmed
the order for nine megaships, citing signs of market recovery after a long
slump. In the business update, it said: "In order to keep pace with market growth and the Group's needs,
the Board of Directors of CMA CGM has approved the order for nine container
ships of 22,000 twenty-foot equivalent (TEU). This order, of which the first
ships will come into service from the end of 2019, will further reduce unit
transport costs, particularly on the Asia-Europe routes.”

And the order
has already been confirmed by Hudong-Zhonghua
Shipbuilding and Shanghai Waigaoqiao Shipbuilding, which have signed LOIs for
the mega-vessels at favorable prices.

The order, the firm said, would help cut transport
costs particularly on Asia-Europe routes enabling to keep pace with the market
growth.

Maerk Line also has said that the fundamentals were at
their strongest since 2010.

CMA CGM said a recent upward trend in
freight rates had led it to expect higher second-half operating profits
compared with the first half, excluding significant variations in fuel costs
and exchange rates.

CMA CGM reported a profit of $470 million for the second quarter, nearly
double the first quarter's results and an improvement of $550 million over the
same period last year. The boost came from a significant increase in shipped
volumes and revenue per container – up 33 percent and 12 percent respectively. APL, which was consolidated in June 2016 in CMA CGM’s
biggest ever acquisition, also remained profitable in the second quarter, with
a $137 million contribution to group operating profit.